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Gamestop's going to start a rental program

It starts in November, but for $60 for 6 months, you get to "rent" whatever used games they have in stores. You get one game to rent out at a time with unlimited rentals, and at the end of the six months, you get to keep the last game you rented.

I'm skeptical to why they're doing this program, but at the same time interested as I want to get away from building a backlog this gen. What do you think?

They're fucked. More and more people are doing digital downloads and they're scrambling to find ideas that will bring in money and spur ancillary sales. The logical thing, in their minds, is to go back to a 2005 Blockbuster sales model.

The "good" thing for them here is that, to investors, subscriptions look like 100% profit. Even for something like Amazon Prime (where they're very possibly losing money on shipping costs) or Netflix (where infrastructure costs could outweigh subscription revenue), investors don't care. They don't give a shit about details. They just see that subscription rate and think "free money". Now, going by the OP, they're ostensibly only making $5 per subscription period, since any idiot would trade up for a $55 game before their term expires. Also, subtract the infrastructure (subscription tracking and whatnot) costs, and they're making less than $5 per subscription period.

TLDR: You know when old people let out a huge fart before they die? This is a Gamestop death fart. At least I hope it is. Fuck them.

Originally Posted by GregN

Grocery stores are like chinese and mexican places; some of them are local.

I'm sure they're doing it just to get people into their shitty stores. Program sounds alright, they're no doubt banking on two different sets of people: 1) the person who signs up and never takes advantage of it, in which case it's a free $60 fot them, and 2) the person who comes in all the time (possibly with children in tow), that buys something or puts a preorder down every time they rent a game.

Now, going by the OP, they're ostensibly only making $5 per subscription period, since any idiot would trade up for a $55 game before their term expires.

If you can find that $55 game you want in store before your membership expires. But yeah, it's what I'd do.

Originally Posted by fenikso

I'm sure they're doing it just to get people into their shitty stores. Program sounds alright, they're no doubt banking on two different sets of people: 1) the person who signs up and never takes advantage of it, in which case it's a free $60 fot them, and 2) the person who comes in all the time (possibly with children in tow), that buys something or puts a preorder down every time they rent a game.

How do I feel about it? Got a very 'meh' sort of vibe.

I would think they're banking hard on the former, but they're probably selling it to investors as the latter.

Originally Posted by Jarofmayo

I can see them getting burnt on this pretty hard. Wonder how many people are just going to take off with games and not return them?

You get one game to rent out at a time, and the last one you rent out is the one you keep. I'm not sure what you mean.

They've had this program since they merged with EB. It's called their used return policy. You can buy a used game for $55 and keep it for 7 days. Then return it and put it towards another used game. If you're like me and have 4 GameStop in a 3 miles radius from you, they will never catch on. Their computer system.isnt smart enough to flag this shit either.

They're fucked. More and more people are doing digital downloads and they're scrambling to find ideas that will bring in money and spur ancillary sales. The logical thing, in their minds, is to go back to a 2005 Blockbuster sales model.

The "good" thing for them here is that, to investors, subscriptions look like 100% profit. Even for something like Amazon Prime (where they're very possibly losing money on shipping costs) or Netflix (where infrastructure costs could outweigh subscription revenue), investors don't care. They don't give a shit about details. They just see that subscription rate and think "free money".

Your information is based on what? Amazon and Netflix are both public companies, their "investors" are shareholders and can look at quarterly 10-Qs prior to purchasing shares. If it's "free money" I assume you have large holdings in both companies?

wyo: The combo of madman and filthyrear is too much.
wyo: I don't mind a bit of trolling but it goes too far.

Gamestop/EB Games has a long history of diving into these programs without laying the groundwork first to properly implement them. At face value, this sounds like a program that will die a short death due to the number of ways it could and probably will bleed money; an increased cost in freight from shipping damaged games to and from HQ for resurfacing (not to mention the resurfacing materials) is the first thing that comes to mind. Use your imagination, there are myriad ways this can and will become a headache for stores and the company as a whole.

@fakeXsound - Since it's only crappy used games they are talking about, I'm willing to bet the profit margin is well higher than $5

What do you mean it's only crappy used games? People trade in newly released games the same week they come out. GS prices any AAA game that released within 12 months at $55 and they're not hard to find. Since you get to keep one used game, most people will keep a $55 game. $60 - $55 = $5.

Originally Posted by madman

Your information is based on what? Amazon and Netflix are both public companies, their "investors" are shareholders and can look at quarterly 10-Qs prior to purchasing shares.

Of course their investors are shareholders. But a lot finance people incorporate big companies like Netflix and Amazon into their mutual funds or hedge funds. What I'm saying, which I think is pretty clear, but I'll explain it for you anyway, is that often they don't care about gross vs net. "Oh, $60 every six months? Great!"

If it's "free money" I assume you have large holdings in both companies?

Yet again a common saying goes over MadMan's head. I don't even know how you're interpreting what I said. To reiterate for your lizard brain, when I say they think of subscription money as "free money", they don't take the cost to implement that subscription and deliver the promised goods and services into account. Let's say I run MadMan's Video Game Disposal Service. For $50 a year, I have a tryhard internet troll come to your house once a month and tell you that you're a tool for owning video games, convincing you to get rid of a few games. The employee brings them back to my Game Destruction Facility where I have SammyBean drop her brownies all over the discs and carts, rendering them virtually unrecognizable. My stupid investors (i.e., the majority) would think, "Wow! That's $50 going to the business for every subscription they sell!" My smart investors would say, "OK, sure, you get $50 per subscriber per year, but you have to pay your troll minimum wage to go out to the subscriber's house once a month. That's about $150 a year right there per subscriber. Then you have to pay for the Game Destruction Facility. The rent is going to be $2,000 a month. And you have to pay SammyBean. Even as an independent contractor, she's going to cut into your budget." Therefore, while I'm charging $50 per subscriber, I'm actually losing much more than $50 per subscriber. Get it?

Last edited by fakeXsound; 10-29-2017 at 10:58 PM.
Reason: typo

Originally Posted by GregN

Grocery stores are like chinese and mexican places; some of them are local.

Yet again a common saying goes over MadMan's head. I don't even know how you're interpreting what I said. To reiterate for your lizard brain, when I say they think of subscription money as "free money", they don't take the cost to implement that subscription and deliver the promised goods and services into account. Let's say I run MadMan's Video Game Disposal Service. For $50 a year, I have a tryhard internet troll come to your house once a month and tell you that you're a tool for owning video games, convincing you to get rid of a few games. The employee brings them back to my Game Destruction Facility where I have SammyBean drop her brownies all over the discs and carts, rendering them virtually unrecognizable. My stupid investors (i.e., the majority) would think, "Wow! That's $50 going to the business for every subscription they sell!" My smart investors would say, "OK, sure, you get $50 per subscriber per year, but you have to pay your troll minimum wage to go out to the subscriber's house once a month. That's about $150 a year right there per subscriber. Then you have to pay for the Game Destruction Facility. The rent is going to be $2,000 a month. And you have to pay SammyBean. Even as an independent contractor, she's going to cut into your budget." Therefore, while I'm charging $50 per subscriber, I'm actually losing much more than $50 per subscriber. Get it?

Hahahaha, love it .

Seriously though, I would like to buy in to this business. Is Madman's Video Game Disposal Service publicly traded?

What do you mean it's only crappy used games? People trade in newly released games the same week they come out. GS prices any AAA game that released within 12 months at $55 and they're not hard to find. Since you get to keep one used game, most people will keep a $55 game. $60 - $55 = $5.

But it doesn't cost GameStop $55 to lose that used game if that's not what they paid for it.

Originally Posted by fakeXsound

Of course their investors are shareholders. But a lot finance people incorporate big companies like Netflix and Amazon into their mutual funds or hedge funds. What I'm saying, which I think is pretty clear, but I'll explain it for you anyway, is that often they don't care about gross vs net. "Oh, $60 every six months? Great!"

Yet again a common saying goes over MadMan's head. I don't even know how you're interpreting what I said. To reiterate for your lizard brain, when I say they think of subscription money as "free money", they don't take the cost to implement that subscription and deliver the promised goods and services into account. Let's say I run MadMan's Video Game Disposal Service. For $50 a year, I have a tryhard internet troll come to your house once a month and tell you that you're a tool for owning video games, convincing you to get rid of a few games. The employee brings them back to my Game Destruction Facility where I have SammyBean drop her brownies all over the discs and carts, rendering them virtually unrecognizable. My stupid investors (i.e., the majority) would think, "Wow! That's $50 going to the business for every subscription they sell!" My smart investors would say, "OK, sure, you get $50 per subscriber per year, but you have to pay your troll minimum wage to go out to the subscriber's house once a month. That's about $150 a year right there per subscriber. Then you have to pay for the Game Destruction Facility. The rent is going to be $2,000 a month. And you have to pay SammyBean. Even as an independent contractor, she's going to cut into your budget." Therefore, while I'm charging $50 per subscriber, I'm actually losing much more than $50 per subscriber. Get it?

Isn't all the infrastructure, except for some software addition, already there? Store, employees, system, no need to go anyone's home.

True enough, RE the $55. They probably pay about $20 for it. But then again, that's a lost $35 they could have made otherwise. It's not like the used AAA games sit on shelves. You can usually find them, but they go quick.

RE the infrastructure, yes, I'd imagine it's mostly there, but that doesn't mean the remainder will be cheap to A) create and B) maintain. In all likelihood, they're not building it themselves. They're paying an IT vendor to create and maintain it (i.e., recurring cost). They also probably have to have additional legal logistics and whatnot in place to roll out the service. So it's not like they're massively overhauling all of GS. This isn't costing them tens of millions of dollars. But I doubt it's insubstantial.

Again, that's just my take on it. I'm not a business analyst; I make corpo media. It could very well be that this service gets a bunch of people in the store every week and gets them to buy impulse items that they otherwise wouldn't have. As far as I can tell, Gamestop's big master plan is to sell fewer games and more merch.

Originally Posted by GregN

Grocery stores are like chinese and mexican places; some of them are local.

I'd like to sincerely THANK everybody that supported SHOCKbox over the (EST 2001) 8 - 9 years I did it. is stocking the SHOCKbox right now!! They also have a huge library of SHOCKbox inserts for DL and or printing.LE GEEK SHOCKbox inserts

I'm not protecting myself from you....I'M PROTECTING YOU FROM ME.SKYWAY PRO Keep this a secret!

What do you mean it's only crappy used games? People trade in newly released games the same week they come out. GS prices any AAA game that released within 12 months at $55 and they're not hard to find. Since you get to keep one used game, most people will keep a $55 game. $60 - $55 = $5.

Originally Posted by JoeAwesome

But it doesn't cost GameStop $55 to lose that used game if that's not what they paid for it.